KARACHI:
The disparity in the value of the rupee between interbank and open markets widened to over Rs2 on Tuesday, compared to around Rs1.50 previously, signalling a potential return of currency volatility amid political turmoil.
The spread, however, stands at 0.72% (Rs2.01), remaining well below the International Monetary Fund’s recommended maximum level of 1.25%.
The rupee dropped 0.04%, or Rs0.13, to Rs281.32/$ in the open market on Tuesday, as per data from the Exchange Companies Association of Pakistan|. This decline is attributed to an uptick in demand for the greenback, notably for Hajj and Umrah.
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Rupee dips slightly but largely stable
Conversely, in the interbank market, the currency remained stable at Rs279.31/$, up by 0.01% or Rs0.02 day-to-day, according to the SBP data. Previously, the disparity had widened to over Rs30-40 between the markets, causing significant volatility. However, efforts by the outgoing caretaker government, including crackdowns on currency smuggling, helped narrow the gap.
Published in The Express Tribune, February 14th, 2024.
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